Friday, November 19, 2010

With gold heading higher today, King World News interviewed legendary trader Jim Sinclair. When asked about the action in gold Sinclair stated, “We have to be right in front of a major move in gold. Today the gold market had all of the indications of what would be considered by the old-time traders (Bert Seligman & Jesse Livermore) as a major turn. This would be a sign to them that the bulls are gaining strength in the market, and given any excuse it will rise violently.”November 18, 2010

Sinclair continues:

“The strategy now would not be to run after spikes and strength, but to begin to take in those periods which will certainly come, of weakness that exist during the day. This is really the first time since we came off of the high, that it’s starting to show a character of wanting to make a new high.

The chorus of complaints about the Fed and their adoption of QE, I call that the backfire of MOPE. You have so many of the new guys convinced that yes, the economy is recovering but not really that fast, and there is no inflation anywhere. Then why in the world is Bernanke going to a $600 billion project which is a rescue plan that comes up during a period of crisis? They can’t understand it.

The other thing is the belief that the financial institutions balance sheets have made such great progress. The bottom line is he (Bernanke) sees what they don’t see. The stumped recovery we’ve had is in fact an economy headed down.

Getting back to gold, this is late 1979. It’s got all of the characteristics of late 1979. If people will go back and look at the long chart they’ll see that there was one violent flip right before it took off and never looked back. And it’s getting very close to that point now. I think what you have seen is a major shake of the tree right before gold takes off.”

Well there you have it from Jim Sinclair, who’s father was business partners with legendary Jesse Livermore. The green light has been given to the upside by one of the great ones, so sit back and enjoy the show.

Thursday, November 4, 2010

Molybdenum juniors will react like the REE juniors have over the past year. I may be early but I am right. I sent out a report on 5 Moly juniors to research. There has been very little price movement yet in these 5 stocks as they are trading in deep bear market territory. Not for long.

stateside

Strategic reserves for rare metals mulled

China Daily, November 4, 2010

A worker takes a break from shoveling tailings out of a channel sluicing crushed mineral ore containing rare earths on the edge of Baotou in the Inner Mongolia autonomous region on Sunday.

A worker takes a break from shoveling tailings out of a channel sluicing crushed mineral ore containing rare earths on the edge of Baotou in the Inner Mongolia autonomous region on Sunday.[China Daily]

Chinese authorities may establish strategic reserves of 10 rare metals to stabilize their supply and prices, a move analysts said reflects the country's growing concern over scarce resources.

The move is aimed at achieving a balance between market supply and demand as well as maintaining price stability, the report said. It is the first time the government has considered strategic reserves for these metals, except for rare earths, tungsten and indium, it said.

Rare metals, which are regarded as "vitamins for the economy", are essential to China's development. Construction of reserve systems will help ensure economic security, analysts said.

"A sound reserve system is like a reservoir, which can help us better use the resources," said an industry insider who did not want to be named.

China is rich in some rare metals, such as rare earths, tungsten, and antimony, but it has not exploited these resources properly. The country can better manage these resources with a reserve system, he said.

China has to import some rare metals such as tantalum for the long term. A reserve can protect the domestic market when there is a shortage in supply or price fluctuations in overseas markets, he said.

Many industry insiders have long called for a formal and comprehensive system to store the rare metals.

A number of countries, like the United States and Japan, have already built their reserve systems for rare metals. China may learn from these countries' experiences to build its own mechanism, they said.

Some analysts said the country's existing oil reserves system, which is formed from national reserves and stockpiling by enterprises, can also offer some lessons in that regard.

"The government and key enterprises in the industry should work together to protect the scarce resources," said Han Xiaoping, chief information officer of domestic energy portal China5e.com.

China's State Bureau of Material Reserve operates under the National Development and Reform Commission (NDRC). It is taking charge of formulating strategies for reserves and managing the State purchase of mineral reserves.

China will sell 50,000 tons of zinc from the country's stockpiles to increase domestic supplies as an energy-saving drive curbs output and boosts prices.

The country will also auction ingots from State reserves on Nov 9, the NDRC said in a statement. These reserves were bought from domestic smelters between February and May last year.

Analysts said the move was probably made to help offset reduced production as China is limiting power supplies to smelters.